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Business responsibility under health law
debated during hearing
By Priscilla Yeon July 18, 2007...Several consumer advocates today spoke in favor of legislation that would increase the financial responsibility of employers under the health care reform law. Activists want to raise the minimum employer contribution from 33 percent to 50 percent of premium costs and employee-participation from 25 percent to at least 50 percent in employer-sponsored insurance. Businesses face financial penalties for not meeting those thresholds. After passage of the health reform law last year, the Division of Health Care Finance and Policy (DHCFP) defined an employer's "fair and reasonable" contribution to be one-third of the premium cost or a 25 percent of eligible workers to participate in their group insurance plan to avoid the a penalty of up to $295 per employee per year. Advocates from the ACT!! Affordable Care Today testified in favor of identical bills filed by Sen. Mark Montigny (D- New Bedford ) and Rep. John Scibak (D-South Hadley). The bills make several proposals, including redefining "affordability" of insurance to include all out-of-pocket costs and allow individuals to be exempt from the state's health insurance mandate if their total insurance cost goes beyond 10 percent of income. Both proposals also prohibit caps on maximum lifetime benefits, codify some implementation measures approved by the Connector Authority, and expand covered services, such as dental, smoking cessation and ambulance services to subsidized health insurance plans. Wilnelia Rivera of Neighbor to Neighbor said the current definition of "fair and reasonable" is "inadequate, unfair and damaging to the basic tenet of Massachusetts health reform, shared responsibility." Rivera said the median employer in the state provides a premium contribution of 77 percent for individual plans and 75 percent for family plans. John McDonough from Health Care for All said the legislative intent of the bill was to have "shared responsibility" among the government, individuals and employers. But he said government and individuals are having a "longer leg" in the new law. He urged the committee to look at the employers' role in the law. Representing the largest business organization and speaking in opposition to the bill, Eileen McAnneny, senior vice president for government affairs at the Associated Industries of Massachusetts, said the bill "violates the agreement that was negotiated between public policy makers and business leaders." McAnneny said it was premature to change the law without giving it a chance to work first. She called statements that the business community is not making enough contributions to the law "simply not true." McAnneny said employers have incurred administrative costs and other expenses by being required to establish Section 125 plans, which allow employees to purchase health insurance on a pre-tax basis. Additional costs borne by employers also include provisions under the individual mandate and other administrative costs. "While the dollar amount of these new employer costs has not been quantified, there is no arguing with the fact that they are very large and represent significantly greater costs than the fair share assessment provision," McAnneny stated in her testimony. Committee Co-Chair Sen. Richard Moore (D-Uxbridge) blasted McAnneny's suggestion that the conference committee that devised the current law agreed on a 33 percent employer contribution on premium costs. "I was at that negotiation, you were not," said Moore. He said the conference committee never spelled out an agreement but the understanding was to make the minimum employer contribution at 50 percent. "That was not part of the deal," said Moore who criticized the Romney administration for allowing the "low" threshold definition. Moore said "some business groups" have misrepresented the legislative intent of the law. He also disagreed with McAnneny that businesses would be incurring more costs if they cover more employees under their employer-sponsored plans. "It's disingenuous to suggest we should feel sorry for the employers because of the individual mandate. They offered a plan on the first place," said Moore. Testifying in favor of the legislation, Jessica Costantino, director of advocacy for AARP, a non-profit organization for people age 50 and over, said she would like the definition of affordability to include other cost-sharing provisions. Scibak said passage of the bill is necessary because the current system will not ensure the success of the health reform law. Critics of the law told the committee a single payer system is preferable because it would wring out major administrative savings from the health care system and enable caregivers to spend more time with patients and less time on paperwork. "I don't believe it is working," Ron Patenaude, president of United Auto Workers Local 2322, told committee members, referring to the health care law and asserting that it fails to address escalating health care costs and "fraud, abuse and mismanagement." Russ Davis, executive director of Massachusetts Jobs with Justice, said maintaining health care benefits is the top issue facing working people and predicted more people will leave Massachusetts due to high health care costs. He also predicted more strikes, like the one organized by teachers in Quincy, over health care benefits. Benefits will be a major sticking point in next year's contract talks with 70,000 Verizon workers on the East Coast, Davis said. "We'll never change our health care system unless we change it to a single-payer system," said Sen. Steven Tolman (D-Brighton). |